Falmer crowds and repaying a £66m loan

[brighton bluenose]

Back in the day when it appeared the new stadium would cost forty-odd million pounds we were told that the break even crowd figure would be in the region of 12,000 bums on seats every other week.

Now the total cost is £93m ie virtually DOUBLE earlier estimates and £66m is via a (admittedly interest-free) loan from TB repayable in just 14 years we are going to have to turn from a club that is losing approx £1m a year to a club that needs to make a profit of around £4m a year just to repay the loan!!!!!!!!!!

I'm sure there may well be some flexibility in the loan period/ terms BUT is this really feasible??!!

What about cash for the playing side and general running of the club??!!

Very simplistically this doesnt add up IMHO!!!

 

[Rich Suvner]

the projections will have been based upon loan capital accuring interest

not a 0% loan that will reduce in value to the club in REAL terms, year on year

 

[pork pie]

We will only need to pay back the capital. That is a very different situation to having to pay interest.

Not only that, with the way the guy is talking, does he really even want the money back to a deadline, or will he "let it ride" if the Club still needs the money?

 

[Giraffe]

Not only that, with the way the guy is talking, does he really even want the money back to a deadline, or will he "let it ride" if the Club still needs the money?

Exactly.

 

[brighton bluenose]

the projections will have been based upon loan capital accuring interest

not a 0% loan that will reduce in value to the club in REAL terms, year on year

I understand that but, again simplistically, we need to turn around from making a loss to making a profit of £4m+ per season.

Just emphasises how desperately we need to get into the Championship and be performing at a decent level there - bottom half of table would be no good whatsoever!!

 

[sten_super]

bluenose, you are of course right. That is why Bloom has a share option on the debt; it is effectively our collateral. I suspect that he will take what money he can reasonably get back from the club and convert the remainder to shareholdings in 2023.

 

[Scoffers]

Also, if we reach the Championship and possibly the Prem at some point, he will probably convert some the loan into shares, as they become more valuble, which will knock a large chunk of what will need to be repaid, of course, we need to be playing well for that to happen.

 

[Father Jack]

I understand that but, again simplistically, we need to turn around from making a loss to making a profit of £4m+ per season.

Just emphasises how desperately we need to get into the Championship and be performing at a decent level there - bottom half of table would be no good whatsoever!!

You've missed the point it wont be four million, because there is no interest, he's also said that he may just turn that loan into shares.

 

[ali jenkins]

If the club cant pay bck the money then he will convert it into shares in the club and will then own in the reigon of 90%

 

[Father Jack]

If the club cant pay bck the money then he will convert it into shares in the club and will then own in the reigon of 90%

Its a loan which is just unheard of anywhere let alone in football. i think your right on your other thread though mate, not a lot will really change.

 

[beorhthelm]

if it wern't feasible they wouldnt be doing it.

 

[brighton bluenose]

You've missed the point it wont be four million, because there is no interest, he's also said that he may just turn that loan into shares.

If the club cant pay bck the money then he will convert it into shares in the club and will then own in the reigon of 90%

You are both wrong to a degree!

1. The loan is repayable by 2023 - that equates to £66m over 14 years - just under £5m a year and thats WITHOUT any interest, however, I take the point that it could be converted into shares!!

2. As he appears to own 75% shares at present worth £18m then a further
£66m converted into shares wouldnt be a 90% share holding - it would be 99% or more!!

 

[brighton bluenose]

if it wern't feasible they wouldnt be doing it.

Dont disagree!!

 

[NF9]

Its not as simple as that though is it, there is more to revenue than just gate reciepts

 

[Napper]

He should just give us 100mil so we can have 3million to purely spunk up the wall

 

[rusty redeyes]

You are both wrong to a degree!

1. The loan is repayable by 2023 - that equates to £66m over 14 years - just under £5m a year and thats WITHOUT any interest, however, I take the point that it could be converted into shares!!

2. As he appears to own 75% shares at present worth £18m then a further
£66m converted into shares wouldnt be a 90% share holding - it would be 99% or more!!

blimey BB, you got nothing better to do with your time!!!

2023, you'll be 62 ish by then, if you're lucky

 

[Papa Lazarou]

You've missed the point it wont be four million, because there is no interest, he's also said that he may just turn that loan into shares.

Well, he has a point in that were they to aim to pay the whole £66m back oby 2023, which is 14 years from now, it would average out at £4.71m as season, or if you take the point Falmer is completed (12 years to 2023) it's £5.5m per year.

I feel he'll be taking some as shares

 

[seagulls4ever]

2. As he appears to own 75% shares at present worth £18m then a further
£66m converted into shares wouldnt be a 90% share holding - it would be 99% or more!!

The Argus says:

Those loans are due to be repaid in 2023 but Mr Bloom could convert them into shares of the club which would see him control more than 90% of the club.

Which is where I suspect he got the 90% figure from.

 

[herbicide]

LOOK! Everything is going to be fine...

http://northstandchat.com/showthread.php?t=150836

 

[Wardy]

Well, he has a point in that were they to aim to pay the whole £66m back oby 2023, which is 14 years from now, it would average out at £4.71m as season, or if you take the point Falmer is completed (12 years to 2023) it's £5.5m per year.

I feel he'll be taking some as shares

Though in effect we could at 2023 get a bank loan to pay him back. The reason we cannot get one at the moment is the lack of money being lent and the lack of any real assests. Come 2023 we will have a ground and with any luck a decent regular crowd figure. On top of that we should be out of recession and thus banks will be more willing to lend us the cash.